Gatchalian seeks stronger framework for PH natural gas industry

MANILASenator Sherwin Gatchalian on Wednesday urged government to establish a stronger legal framework to develop and regulate the country's downstream natural gas sector to attract more foreign investments in light of the upcoming expiration of the franchise of the Malampaya gas field in 2024.

"There is a need to clarify the government's policy on our natural gas resources given the complexity of the industry, the current lack of an institutionalized regulatory framework, and the need to replace the fuel sources of existing natural gas plants," Gatchalian in a statement.

Gatchalian, chair of the Senate Committee on Energy, said this will be the crux of the hearing that his panel will conduct Thursday.

Representatives from the DOE, the Energy Regulatory Commission, National Power Corporation, Philippine National Oil Company, and the National Grid Corporation of the Philippines, among others, are expected to attend the public hearing.

The Senate inquiry was set in motion by Senate Resolution No. 699, which Gatchalian filed last March 21.

Gatchalian said the Malampaya Gas-to-Power Project supplies fuel to three natural gas plants with a total installed capacity of 2,700 megawatts (MW), comprising 17.85 percent of the installed capacity of the Luzon grid, and 12.49 percent of the installed capacity of the national power grid.

Significantly, he said these plants served 53 percent of Meralco's electricity demand for the March 2018 billing.

The utilization of downstream natural gas started in 1998 with the declaration of commerciality of the Malampaya-Camago wells, resulting in the harvesting of the first gas reserves in 2001.

In the same year, the Department of Energy (DOE) was anointed the lead government agency in the development of the Philippine natural gas industry through Executive Order No. 66.

In 2017, the DOE issued a Department Circular that established the regulations to be followed with respect to siting, design, construction, expansion, rehabilitation, modification, operation and maintenance of the Philippine Downstream Natural Gas Industry Value Chain.

Gatchalian said that with the circular, the DOE has made itself both the policy-maker and regulator of the downstream natural gas industry.

Considering the importance of natural gas in the country's energy mix, as well as the DOE's drive to make the Philippines a liquefied natural gas hub and its current pronouncement of a 50 percent baseload and 50 percent mid-merit energy mix, further development of the industry would be necessary to provide certainty and attract more foreign investments, he said.

Thus, the hearing will be conducted with the end view of enacting appropriate legislation for its development and regulation, Gatchalian said. (PR)

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